Managing your trust with overseas beneficiaries

If you have a New Zealand trust and your children or other beneficiaries have moved overseas, it’s important to be aware of potential and significant unintended tax implications of any distributions to the overseas person.

Many countries, including Australia, the UK, Germany and the USA, have specific rules around foreign trusts. What may seem like a straightforward distribution from a New Zealand trust can sometimes trigger tax liabilities for beneficiaries abroad, particularly if the distribution includes capital gains or income that hasn’t been taxed in the country they reside in.

This is especially important to consider when planning to wind up a trust or make large one-off distributions.

What Should You Do?
If your trust has offshore beneficiaries, or you anticipate it might in the future, we recommend discussing your plans with us well before any distributions or trust wind-up. We can work with you (and offshore advisers if needed) to help avoid any nasty tax surprises.

Get in touch
Every situation is unique, and this is a complex area. If you have a trust with children or beneficiaries living overseas, please reach out, we’re here to help.